U.S. Deficit Reaches Record High After Scheduling Fluke
Treasury Department found it increased by 48 percent compared to last year — to $205 billion
The United States had a record-high deficit last month, as the rate increased by almost half compared to last year because of a scheduling fluke, according to federal data released Thursday.
The U.S. Department of the Treasury found the deficit increased by 48 percent from the same month a year ago, to $205 billion.
The increase represents an additional $66 billion.
But most of that number is because $44 billion in entitlement payments went out earlier than usual — though current federal policies are driving much of it, too.
The federal government issued benefits early this year for many entitlement programs because of a scheduling issue. Benefits for December usually come on the first of the month, but they went out early because that day fell on a Saturday, the Associated Press reported.
November essentially reflected payments that normally show up the next month.
The November deficit still did show notable increases when extra entitlement payments are taken into account. The data show that the government collected one percent less in revenue, with more individual withholding and a drop in business insurance contributions.
Corporate taxes also dropped by 23 percent — against an 18 percent jump in spending.
MarketWatch reported that the increase in spending primarily came from entitlements and defense. The federal data showed a 35 percent increase in Medicare payments, a 27 percent increase in defense spending, and a 74 percent increase in veterans affairs costs.
President Donald Trump has done a lot to tackle the size of the federal government through his actions to roll back rules and regulations. But he has also championed proposals that increase the deficit dramatically, such as his tax cuts, which he signed into law despite fierce opposition on Dec. 22, 2017.
The Tax Cuts and Jobs Act became the first major piece of legislation that the president signed in his term of office. The law lowers corporate and most individual tax rates while simplifying the code.
The Tax Foundation found the law will result in an estimated $1.8 trillion less federal revenue over the next decade.
Trump has also taken aim at existing international trade agreements as part of his promise to ensure domestic workers can compete in the global market.
He has primarily worked to renegotiate existing trade deals but has also put pressure on countries known for cheating agreements, such as China. This has put the country on the edge of a trade war.
The Treasury data found customs duties doubled to $6 billion likely due to the impact of rising tariffs.
The Trump administration has imposed multiple tariffs on the country this year; the latest was a 10-percent tariff on $200 billion worth of imported goods.
China was already hit with $50 billion worth of tariffs earlier this year.
Both countries agreed in early December to a 90-day tariff break in the hopes of resolving their differences.
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